A laudable initiative of Sebastián Piñera’s Government created the Electronic Registry of Companies under the control of the Ministry of Economy with the purpose of “Simplifying the Regime of Constitution, Modification and Dissolution of Mercantile Companies”. As a matter of fact this is the name of the Law (20.659) that creates the mentioned registry, most commonly known as the “Law of Companies in 1 Day”.

This Law allows users, among other things, to create a society by filling out an online form and then signing it, from any computer, with an Advanced Electronic Signature (AES), which can be acquired by anyone in certain accredited entities, obtaining a legally constituted company.

Having passed already 3 years since the Law’s entry into force, we seek to present some of the shortfalls and disadvantages detected in our practice, that are generated by the use of the mentioned Registry.

The first and most serious problem is that, despite the legal mandate, it is not possible to enjoy the benefits offered by the law in all Notaries. This is because many notaries simply refuse to offer the service. The reasons provided are various: “they don’t have the electronic signature”, “ they don’t know how to use the platform”, “ it’s not good for the business”, “they deal with the electronic signature only from 9 to 9:30” etc.

Clearly both the Law and the Regulation indicate that, when the users lack of an AES or do not want to use it, they will have to physically sign the constitution form before a Notary, who will later have to sign it electronically before the Registry.

Also, in some cases, like the one of the woman married with conjugal community or the agent that signs on behalf of another person, it is mandatory to approach a notary in order to accredit that quality, being the notary who will give authorization and sign the registry.

In the Frequently Asked Questions section of the registry’s web page we find the following answer to the question: Which Notaries are authorized for this procedure?

“The Law establishes that all notaries in the country have to provide this service. Under the Law 20.494, approved in January of 2011, all notaries have the advanced electronic signature. If a notary indicates that they don’t know how to offer the service, we suggest that they write to us by filling out the Contact Form, indicating the name of the notary, in order to offer our support and solve the issue. If the notary refuses to provide the service, you can recur to the Visiting Minister of the appropriate Court of Appeals, whose name you can find in a visible place in all notaries.” (Portal http://www.empresasenundia.cl/preguntas-frecuentes/)

We believe that a user who only wanted to create a company in “1 day” wouldn’t be willing to turn to the Visiting Minister in order to achieve it, if not simply turn to another notary and set aside the notary who denied the unscathed service.

Another controversy that I had to face, although less recurring, is that some notaries deny to authorize the signature in public deeds of the legal representative of the company created through the system.

The reason given in this case has been that a representative appointed with “an electronic instrument” wouldn’t have the necessary faculty to sign a public deed. This would happen in all companies created through the system that name their administrators directly in the statute, that is, the majority.

The problem arises because the doctrine understands that the mandate must comply with the same formalities of the act for which it is granted. In addition, the general mandate, like the one possessed by the company administrator whose powers have not been limited, must be granted with public deed.

To be continued…

Santiago Henriquez C, Lawyer.

Translation: Giorgia Vulcano

Picture: Anders Jildén (CC0)